I have tried the 'start in caverns' mod, and even when it works, I found it boring. It's practically no different than bricking-shut your entrance on the surface. As for the embark, world size is a very understated part of FPS. Using a Small or Pocket world <500 years, 3x3 & 4x4 is still quite manageable. Doubly so if you perform basic maintenance every few years like 'clean all' and atom smashing old clothing.
I'm interested, but I don't really like mods.
That's fair. Many mods are geared towards a specific audience or are otherwise extreme overhauls of some sort. I would like to have the kind of mods I use in my solo games; adding variety to core elements without changing any of the game's systems.
I've done a number of cavern-forts over the years and find it quite a bit enjoyable. I tend to gravitate towards using the caverns pretty much whenever I can. As for modding, I really do feel like it'd be a nice change to see more mod sucession games. It'd liven things up for me as I've not explored much beyond vanilla.
DF modding is a vertiable rabbit hole, you can go as soft or crazy as you want.
Case in pointI'd suggest Splint's Vanilla Expanded - which is what it says on the tin - might add enough spice to the caverns without adding game-ending beasties. It's also less of a leap from Vanilla than Dark Ages - but I think modding is the right choice. Most veteran players know everything about the usual cavern critters, so adding in some unexpected creatures should increase the challenge.
PTW and also I second the notion to consider SVE. It has little things like more cavern fish, which don't change the game flow while still adding variety. With caverns all being the same, some new stuff for tales would be great.
How would migrants, merchants, visitors, and invaders be handled?
I looked at Vanilla Expanded; I like the extra gear (could stand a few more pieces), and I love the expanded creatures list. That said, it's missing a couple things I would prefer;
1. More civs! Reading Legends is far more entertaining when you have hostile Succubus, Orcs, and Dark Elves alongside friendly Paladins & Druids. Siege & trading goes from predictable to hilarious as well.
2. Gem crafting. This one is really personal, I just love love being able to make statues and furniture using gemstones. Artifacts get 10x cooler as well (artifact diamond door).
2a. I would prefer seeing a more robust equipment list a la Dark Ages, but the additions in VE would suffice.
Again, I feel all of the aforementioned fits reasonably well; adding traditional high-fantasy elements, but without changing the core gameplay we all know and love (i.e. no complex crafting overhauls with a dozen new workshops).